sign in sign up
<<
Home , Lynmouth, North Sea flood of 2007, River Thames, Toll Bar

, 2007 JuneU.K. Summer 25 2007

160 24 hour 20 July Monthly Average 140

25 June 120

100 15 June 80

Rainfall (mm) 60

40

20

0 Hull Pershore

300%

250% e ag 200% aver

150% 2000

100% 1971-

% % Jan Feb Mar Apr May Jun Jul Aug 50%

0% 2007

July 20TM , 2007 Risk Management Solutions Ic Acknowledgements

Author Alice Stuart-Menteth Editor Shelly Ericksen Graphic designer Yaping Xie Contributors Claire Souch, Neena Saith, Ben Drinkwater, Robert Muir-Wood, Celine Herweijer, Dag Lohmann References 1947 U.K. Floods: 60-year Retrospective. RMS, 2007 (www.rms.com)

Association of British Insurers (www.abi.org.uk)

Blackburn, M., B. Hoskins, and J. Slingo, 2007. Notes on the Meteorological Context of the U.K. Flooding in June and July 2007. Walker Institute publication, , U.K.

Chartered Institute of Loss Adjustors (www.cila.co.uk)

Dealing with Flooding: A review of floods in North and North-West January 2005. .

Environment Agency (www.environment-agency.gov.uk)

June 2007 Hydrological Summary for the , Center for Ecology & Hydrology (CEH)

Trenberth K. E., P. D. Jones, 2007, IPCC WG1 AR4 Report, Chapter 3, 235–336.

U.K. Meteorological Office (www.metoffice.gov.uk)

Image Sources

NOAA/ESRL Physical Sciences Division, Boulder Colorado (www.cdc.noaa.gov) Ic Table of contents

EXECUTIVE SUMMARY 1

INTRODUCTION 2

THE SUMMER 2007 U.K. EVENTS 4 June 25 Flood Event 4 July 20 Flood Event 5

THE CAUSE OF THE FLOODING 8 Antecedent Conditions 8 Summer Conditions 9 June rainfall 9 July rainfall 10

INSURED LOSSES 11

EVENT IN PERSPECTIVE 13 Hazard Perspective 13 Are the extreme rainfall events a product of climate change? 13 Does the abnormal rainfall this summer increase the risk of flooding this winter? 14 Market Perspective 14

 EXECUTIVE SUMMARY

The summer of 2007 has been the wettest summer in England and since precipitation records began in 1766. During June, July, and August a succession of depressions tracked over the U.K., bringing heavy rainfall and triggering multiple flooding events. The floods ranged from small, localized flash floods to widespread events affecting major river basins. Two particularly large floods hit within just four weeks of each other. First, the northeast of England was badly affected following heavy rainfall on June 25, which caused flooding in cities and towns such as Sheffield, , Rotherham, Louth, and Kingston-upon-Hull. Some areas were hit again by further flooding after more severe rains on July 20, which affected a much larger area of central England, including , , , Evesham, and Abingdon. These have been the most severe floods in 60 years since the March 1947 snowmelt floods, and the effects of the summer 2007 floods on some major , such as the Lower Severn, have been comparable to the 1947 event.

Figure 1: Flooding in Toll Bar, Yorkshire after June 25, 2007 rainfall event

The summer floods have resulted in the largest flood insurance losses in the U.K. to date. As of September 2007, close to 60,000 claims have been reported and RMS estimates total insured losses to be in the range of £2.25–£3.25 billion from the two major flood events. Flood insurance was introduced into standard insurance policies in the U.K. in the 1960s, and while the summer 2007 floods were not as physically extensive as the 1947 flood, the two major summer 2007 flood events exceed the previous largest insurance flood loss, which was caused by the November 2000 floods. This report reviews the summer 2007 flooding events in the context of the key drivers of the flood and the losses together with the implications for the insurance market and catastrophe flood risk modeling. 

1 INTRODUCTION

The floods of summer 2007 were linked to a pattern (Figure 3). Table 1 presents a time series of the of very wet and unstable weather across the U.K. over summer flood events, of which this report focuses on the course of several months. The unseasonably wet the two biggest and most devastating events — the weather began in May and continued throughout the June 25 and July 20 floods. summer, with record-breaking rainfall totals in June This report discusses the characteristics, drivers and July. Exceptionally intense rainfall events caused and impacts of the summer 2007 flooding events. At severe flash flooding in many areas across the U.K. the time this report was published (mid-September and, as catchments became saturated, swollen rivers 2007), the insurance market, the Environment Agency, overtopped their banks in several major river basins. and other government bodies were still evaluating Intense heavy rainfall is not unusual during the the full extent and impact of the floods. This report, summer, but in 2007 the frequency and spatial extent which summarizes the damage and cause of these was unprecedented. During this period, there were major flood events, is based on the information two exceptional rainfall events on June 25 and July available at the time. 20 that caused widespread flooding across England During the summer floods, RMS sent out several

Date of Locations Flooded Flash Major River Event(s) Flooding Flooding

June 1–7 (E) √ June 8–14 Lancashire (E); Northern Ireland, Ceredigion (W) √ June 15–21 County Durham, , Herefordshire, North √ √ and West Yorkshire, Shropshire, Worcestershire (E); Ards, Down, North Down (NI); Ayrshire, Lanarkshire (S); Ceredigion (W) June 22–28 Yorkshire, Lincolnshire, Humberside, Derbyshire, √ √ Nottinghamshire, Shropshire, Worcestershire (E); Peeblesshire (S); Denbighshire, Flintshire, Monmouthshire, Wrexham (W) June 29 – Buckinghamshire, Lancashire, West Yorkshire (E); √ July 5 Antrim (NI); Midlothian, Moray (S) July 13–19 County Durham, Cumbria, Lancashire, North √ Yorkshire, Worcestershire (E); Coleraine, Larne (NI); Ayrshire, Dumfriesshire, Ross and Cromatry (S); Denbighshire (W) July 20–26 Bedfordshire, , Buckinghamshire, √ √ Cambridgeshire, Dorset, , Greater , , Herefordshire, , Lincolnshire, Northamptonshire, , Shropshire, Warwickshire, West , , Worcestershire (E); Newport, Monmouthshire, Powys, Torfaen, Glamorgan (W) August 20–21 Devon, √

Table 1. Summary of 2007 June–August Floods (E: England, NI: Northern Ireland, S: , W: Wales)

2 Figure 2: Flooding observed in Tewkesbury during RMS reconnaissance surveys

Main Affected Rivers reconnaissance teams to survey the damaged areas 25 June Flood Event and speak to residents and businesses about their 20 July Flood Event experience. The teams, which included seven flood and vulnerability specialists, visited Doncaster, Sheffield, Barnsley, Catcliffe, Tewkesbury, Evesham, Oxford, Abingdon and . Information gathered from the reconnaissance surveys has been used throughout this report, in particular to inform the assumptions when deriving loss estimates for the ! Leeds Hull ! events which are discussed within the report. 

! Doncaster ! ! Sheffield Louth

Birmingham !

! Worcester

Gloucester ! !Oxford

! ! London Reading

Figure 3: Flooded postcode sectors from June 25 (blue) and July 20 (purple) flood events collated by RMS Catastrophe Response, from a combination of RMS field reconnaissance, media reports, and other Web0 reconnaissance15 30 60 information. 90 120 Kilometers Each whole postcode sector is unlikely to have flooded everywhere, especially in rural areas, where postcode sectors cover a larger area

3 THE Summer 2007 U.K. FLOOD EVENTS

The two severe rainstorms of June and July caused overflowed in Leeds, flooding just over 100 properties. widespread fluvial and flash flooding across England and The city escaped catastrophe by millimeters as the flood parts of Wales (Figure 3). In both events, the flooding waters continued to rise on Monday. The River Don in had distinct phases: flash flooding with surface runoff, Sheffield burst its banks, flooding properties, including and extremely high flows in small responsive catchments the many commercial and industrial units that lie along followed by extensive inundation as the runoff the river. During Monday night, the River Rother, to the concentrated along the major river basins. These two south of Sheffield, overtopped its banks, flooding around events are discussed in more detail in this section. 100 properties in the flood-prone village of Catcliffe. Flash flooding is defined as the result of heavy or Flood depths were so high that bungalows were almost excessive amounts of rainfall within a short period of completely submerged by the flood water. The flood time, usually less than six hours, causing water to rise wave continued, traveling down the River Don and its and fall rapidly. It includes sources of flooding from small tributaries from Sheffield through Rotherham toward rivers with rapid response times to rainfall, together with Doncaster. On Wednesday night the River Don and its overland flow, which in the majority of cases is caused tributaries overflowed in and around Doncaster, severely by the rainwater exceeding the infiltration capacity of flooding areas in the North of the city. Table 2 lists the the ground. This is of particular concern in urbanized number of flooded properties reported in some of the landscapes, were there is little capacity for the ground to worst affected towns and cities (Figure 4). absorb rainfall due to the built environment. The highest In most cases, flood waters quickly receded, except standard for surface water drainage in England and Wales in the cases of Bentley and Toll Bar in Doncaster, where is typically 30 years. Drainage and systems were the water was not able to drain away easily, and several overwhelmed by the extreme summer rainfall totals, hundred properties were submerged for several days. which exceeded the 100-year rainfall amounts in many These two areas, along with Catcliffe, featured heavily in locations. Streets became rivers with water pooling in the media coverage at the time. In most cases the flooding dips and basins. In some areas, standing water remained for several days. June 25 Flood Event ! Leeds Hull ! By late June, soil moisture and river levels were higher Aire ! Wakefield Don than average due to wet weather conditions during the Dearne

! previous seven weeks, in particular from heavy rain that Don Doncaster ! Rotherham fell on June 15, and were further tested by the high Sheffield ! Louth ! rainfall amounts that fell on Monday, June 25. Hull and the neighboring town of East Riding were Rother particularly badly hit by flash floods, as the drainage

05 10 20 30 40 systems were unable to cope with the extreme levels of Kilometers Figure 4: Map of northeast England depicting the area most badly affected by rainfall. As the day progressed and the rain and over-land the June 25 floods flow fed into the already swollen rivers, the River Aire

Region Number of Flooded Fluvial Flood (River, Date) Buildings Hull 6500 √ East Riding 5800 √ Sheffield 1273 √ Don, June 25 Doncaster 5171 √ Don, June 28 Leeds 130 √ Aire, June 25

Table 2: Towns and cities badly affected by the June 25 event

4 Figure 5: Flooding in Worcestershire during the July floods was caused by flood defenses being overtopped by the Berkshire and Stratford-upon-Avon, the water took up to extreme river heights. However, RMS reconnaissance three days to drain away. teams also observed breaches of flood defenses in some By Saturday, July 21, much of the water had reached parts of Sheffield, where parts of stone and brick walls the River Avon in Warwickshire and Worcestershire, were pushed away by the force of the water. flooding towns and villages along its banks to a depth of nearly two meters in places (Figure 5). Exceptional July 20 Flood Event river flows were recorded in Evesham (Worcestershire), In the early hours of Friday, July 20, a deluge of heavy where levels on the Avon were the highest ever recorded rain fell across central and , triggering (based on an incomplete series) since 1848. Widespread pockets of flash flooding across most of England and parts flooding occurred along the Severn from Worcester of Wales, including areas such as Barry (in South Wales), through Tewkesbury to Gloucester. Tewkesbury, located Gloucestershire, Lincolnshire, Wiltshire, Hampshire, at the convergence of the rivers Avon and Severn, , Berkshire, and . Many smaller was particularly badly hit — flood waters entered rivers and streams burst their banks in the following Tewkesbury for the first time in 247 years. hours, leaving homes flooded with up to five feet of There was also widespread flooding along the River water in places. In subsequent days, the rainwater runoff Severn from Upton-on-Severn down toward Gloucester. entered the major river system. Due to the heavy rains Because the town’s mobile defenses did not arrive in in June, soil moisture and river levels were higher than time, severe flooding in Upton-on-Severn was blamed average, which exacerbated the extent and severity of on the Environment Agency (EA). The mobile barriers, a the flooding. The flash floods on July 20 were followed flood defense solution along parts of the rivers Avon and by extremely high flows in small responsive catchments Severn that are deployed when rainfall forecasts and river such as the Isbourne (Worcestershire) and the Teme and levels indicate that flooding is imminent, were located Ock (Oxon). More extensive flooding then followed as over 40 miles away and the vehicles carrying the defenses runoff concentrated in the major river basins, leading to were caught in traffic due to severe flooding on the flooding along the Avon, Severn, and finally the Thames. roads. The EA claimed that the river levels were so high In some locations, such as Pangbourne and Thatcham in that the water would have overtopped the barriers in any

5 ! Manchester 25, as the flood wave traveled down the Thames. Villages Louth ! and towns farther downstream along the Thames as far as Windsor, including Reading and Pangbourne, were placed on flood alert but escaped flooding when water levels finally peaked on Thursday, July 26. Table 3 lists Severn ! the number of flooded properties reported in some of Teme Birmingham Avon the worst affected towns and regions (Figure 6). The ! ! Worcester Stratford-Upon-Avon ! Evesham EA reported that no defenses were breached during ! Severn Tewkesbury ! Gloucester this flood event and that flooding was caused by defense ! Oxford ! Abingdon overtopping. Thames London ! Reading ! Both of these events not only caused property

012.5 25 50 75 100 Kilometers damage and interruption to business operations, but also affected the country’s infrastructure. There was serious Figure 6: Map of central England depicting the area worst affected by the July 20 floods disruption to transport during both events, with many roads (most notably the M5 in southwest England) closed case. The mobile barriers were successfully deployed in due to flooding and landslides on the night of Friday, July Shrewsbury and Bewdley and were also used to save the 20, leaving travelers stranded. In many cases, roads were Walham electricity switching station, near Gloucester, badly damaged by the floods and left in need of repairs from inundation. The flood wave peaked in Gloucester (Figure 7). Thousands of vehicles were affected by the on Monday, July 23, and the city center narrowly avoided flooding as roads suddenly turned to rivers. In most major flooding. cases, vehicles were damaged completely, requiring full The flood wave continued to travel along other river replacement, especially if electric systems were affected. catchments, notably the Thames and Great Ouse rivers. Abandoned cars also interfered with transport, as they The small catchment of the caused flooding obstructed many roads. Landslides and flooding blocked in Abingdon early on Sunday morning. Oxford and many railway lines, closing down some commuter lines neighboring villages were flooded on Wednesday, July for several weeks.

Figure 7: Roads were badly damaged during floods

6 Number of Flooded Region Flash Flood Fluvial Flood (River, Date) Buildings Gloucester 1150 √ Severn, July 21 Tewkesbury 1500 √ Severn and Avon, July 21 1200 √ Chelt, Severn, July 21 Abingdon 100 √ Ock, July 22 West 1655 √ Thames, July 25 Oxfordshire

Table 3: Towns and cities most affected by the July 20 event

Disruption to power and water supplies during the The agricultural sector was also badly hit by the July floods was caused by flooding at the Castlemeads floods. Crops were submerged and the National Farmers power sub-station near Gloucester and at the Mythe Union reported that all agricultural sectors had been water treatment plant in Tewkesbury. At the peak of affected by the summer floods. Crops of peas, carrots, flooding, around 140,000 households were left without potatoes, and broccoli were lost during the June floods water and 50,000 without power. Fortunately, power and maize, potatoes, and hay during the July event. It is supplies were restored within 48 hours, and the first estimated that around 40% of the pea crop was destroyed water supplies were turned back on during Thursday, July by the events. Where floodwater contained sewage, 25, although the water was not deemed safe for drinking crops had to be destroyed, and to avoid contamination of until August 7. Several other power sub-stations were at new crops, restrictions on when future planting can take risk during the peak of the July event in Oxfordshire and place will have to be imposed.  Gloucestershire, but were narrowly saved.

7 THE CAUSE OF THE FLOODING

May to July 2007 was the wettest summer in England and tended to become slow moving, resulting in more and Wales since rainfall records began in 1766. U.K. Met prolonged rainfall than in situations where the weather Office figures show a three-month rainfall total of 387.6 systems are more mobile. The trough to the West of mm, compared to the 1971–2000 average of 186.3 mm. the U.K. directed air from a more southerly track than A steady stream of low pressure systems tracked over normal, passing over warmer sea temperatures, and the U.K., bringing heavy rainfall to many parts of the therefore the air was likely carrying more moisture country, highlighted by two extreme rainfall events on (Blackburn et al., 2007). June 25 and July 20, which resulted in record-breaking June and July rainfall totals. The wet summer also Antecedent Conditions resulted in below average sunshine, reducing evaporation The meteorological conditions prior to the summer rates, which are usually highest at this time of year. The were important contributing factors in the widespread extreme nature of the rainfall, combined with the low and severe flooding that resulted. Rainfall was above evaporation rates triggered some of the worst summer average across England during the winter months of flooding seen in this country for many years. December 2006–February 2007, which increased soil The anomalous wet weather of the summer months moisture levels and filled up the aquifers (underground can be traced back to the large-scale weather pattern layers of rock, sand, or gravel that contain water). that had persisted over the North Atlantic and Europe followed with close to average rainfall over the U.K. in since early June, driven by the position of the jet March, followed by an usually dry April and a very wet stream (Figure 8). Since early June, the had May (Figure 9). The above average rainfall in May caused been located farther south than its normal position, soil moisture levels to increase, leading to higher runoff particularly over the eastern Atlantic. There was also rates. a persistent train of waves in the jet stream, from the -fed rivers began a lagged response to North Pacific through to Europe, with a trough located the exceptionally wet weather, with the close to the U.K. Under these synoptic conditions the in Berkshire reporting its third highest spring runoff Atlantic weather systems were steered toward the U.K. since 1975. Despite river levels being exceptionally low

The jet stream is a relatively narrow, fast flowing current of air, usually located about 11 km high in the Earth’s atmosphere. It helps determine the location of high and low air pressure at the Earth’s surface and is also responsible for generating and steering weather systems over Europe.

Figure 8: Wind speed anomaly at 200 mb showing the anomalously high band of winds to the south of the U.K. known as the jet stream. Source: NOAA/ESRL Physical Sciences Division, Boulder Colorado (www.cdc.noaa.gov)

8 mm at nearby Birmingham Airport. 300% The second and more extreme rainfall event was 250% associated with a stationary low pressure system centered ge ra 200% over Warwick (South of Birmingham) at 06:00 UTC on ave Monday, June 25, with a central pressure of 995 mb. The 150% 2000 low pressure acted to draw in moisture from the North 100%

1971- Sea, resulting in heavy and persistent rainfall for much of

% % Jan Feb Mar Apr May Jun Jul Aug 50% the day. The rainfall persisted through Monday morning and early afternoon across the northern half of England 0% 2007 from The Wash and toward Wales. By 12:00 UTC, the low pressure system had drifted very slightly Figure 9: England rainfall anomalies for the months of January to August 2007, south, and was centered over Oxford with a central based on 1971–2000 average (U.K. Meteorological Office) pressure of 993 mb. During the late afternoon and early evening, the low drifted northeast, away from the U.K. at the beginning of May, river flows recovered rapidly Rainfall totals in most affected locations far exceeded from mid May onward, and by the end of the month, their monthly June averages in a 24 hour period (Figure the Great Ouse, flowing through Northamptonshire and 10) and Fylingdates () recorded 103.1 was flowing ‘above normal’ at 179% of the mm rainfall in 24 hours. The Met Office described the long-term average. The notably wet conditions in May rainfall event as a 1-in-100 year event. were key to setting up prime antecedent conditions By the end of June 25 the Environment Agency for flooding during the summer. By the end of May, (EA) had more than 270 flood alerts in place across several flood warnings were in place and the U.K. was England and Wales, more than 15 of which were severe vulnerable to flooding from further heavy rain events. flood warnings defined by the EA as “Severe flooding is Summer Conditions expected. There is extreme danger to life and property.” Record June maximum flows were established in 12 of Above average rainfall continued into June and July the 75 index stations returning high flow data, including with many intense rainfall events, some record breaking some of the major rivers such as the Severn, Trent, and (Figure 9). Given the wet antecedent conditions, the Dee in . In , period-of- numerous flash floods occurred as a response to heavy record maximum flows were recorded in a number of rainfall events during this period (Table 1). The England catchments including the Rother, the Dearne, and the and Wales May–July rainfall totals were the wettest on Don, all of which were responsible for flooding in South record since 1766. Some of the smaller flash floods Yorkshire. A large proportion of the flooding was due to would not have occurred if the soil conditions had been over-land flow, which contributed to the anonymously more typical for this time of year. Episodes of minor high June runoff totals that were recorded across the flash flooding continued throughout August as conditions U.K. from to northeast Scotland, with many were primed by the extreme wet summer conditions. index gauging stations in northeast England and the Midlands establishing new maximum June runoff totals. June rainfall

East and northeast England recorded the highest June 160 24 hour 20 July rainfall total since records in this region began in 1914. Monthly Average 140 The month of June was characterized by two exceptional 25 June outbreaks of rain on June 15 and 25. A complex low 120

100 pressure area moved slowly eastward across the country 15 June between and 17, triggering the first significant 80 flooding event, which commenced on Friday, June 15. 60 Heavy rains were triggered over a wide area of the U.K., Rainfall (mm) most notably in the and Yorkshire. Many 40 locations were subject to heavy rainfall, with some areas 20 receiving up to 50 mm of rain in just four hours. Rainfall 0 reports from Edgebaston, Birmingham show that 86 mm Birmingham Hull Pershore of rain fell in just 24 hours (between Thursday night and Figure 10: Maximum 24-hour and monthly average rainfall values during the Friday night), compared to a monthly June average of 56 exceptional June and July rainfall events

9 Figure 11: River Thames in central Oxford, July 27, two days after the peak of the flood wave

With river catchments becoming saturated by the end of nearly four times the monthly average total. Other June, the flood risk extended into many basins, making locations recorded well above the monthly average in many areas extremely vulnerable to further flooding for less than 24 hours, with 63 mm recorded in Lyneham, the following few months. Oxfordshire, (July monthly average of 35 mm) and 40 mm at Heathrow (July monthly average of 45 mm) July rainfall between 18:00 UTC on Thursday, 19 July and 18:00 July was also dominated by cyclonic activity with UTC on Friday, July 20. frequent heavy and prolonged outbreaks of rain, which At the height of the flooding the EA had 16 severe resulted in the wettest July since 1888. The most notable flood warnings in place. Around 40% of indexed rivers in downpour in July occurred on Friday, July 20, when England and Wales reported new July maximum flows, extremely heavy rain affected parts of south and central and period-of-record maximum flows were recorded England. The rain was a result of a slow moving low in the rivers Teme (Worcesterhire) and Lambourn pressure system located over Calais, France on Friday (Berkshire). The River Avon at Evesham recorded morning, which drifted slowly northwest on Friday, its highest maximum flow since 1848, based on an July 20, bringing with it a surge of warm continental incomplete time series. In the worst affected areas of the air to southern and central areas of the U.K. The warm lower parts of the Severn, the Warwickshire Avon basins air combined with cooler air to the North, creating a and some upper reaches of the Thames catchment, flood broad area of instability classed as a mesoscale convective flows were comparable and may have exceeded those of  complex (MCC). March 1947. The highest 24-hour rainfall accumulations were recorded in Pershore, Worcestershire and Brize Norton in Oxfordshire, with 142.6 mm and 126.2 mm recorded, respectively. In Brize Norton, West of Oxford, 101 mm fell within seven hours, three times the July average and the highest daily rainfall since records began in 1968. Most of the Pershore rain fell within 16 hours and was

10 INSURED LOSSES

As of mid-September 2007, the market continues to properties were flooded, the council admitted that evaluate the magnitude of the summer 2007 flood losses, their properties were self-insured. For private homes, and the final outcome may not be confirmed for several the penetration of insurance, in particular contents months as claims continue to be settled and paid. Based insurance, is likely to be lower than the country average. on an analysis of the events at the time, RMS estimated The ABI reported the average domestic and commercial the insured loss for the two main flood events of the claims to be £30,000 and £90,000 respectively for the summer: £1.25–1.75 billion for the June 25 floods and June floods and £40,000 and £90,000 for the July event. £1– 1.5 billion for the July 20 events. The loss estimates The motor industry estimated losses of £25 million from include property and motor damage and cover business the summer floods, with 4,500 motor claims. interruption and alternative living expenses as well The higher average claims cost is also likely to be additional factors that could amplify the losses given the driven by the severity of the flooding at each location. spatial extent and severity of the floods. Claims analysis research at RMS from previous flooding At the end of August, the Association of British events shows that costs from flash flooding are typically Insurers (ABI) reported that around 27,000 domestic lower than from fluvial inundation, as the depths and and 6,800 business claims had been filed for the June length of the flooding are usually smaller. RMS estimated floods and an additional 17,500 residential and 7,500 that flash flooding was the cause for around 70% of the business claims for the July floods. Although the number properties damaged during the June 25 floods, a statistic of residential properties affected by the July floods is confirmed by the EA. The contribution of flash flooding lower than the June flood events, average claims are is expected to be less for the July floods, due to the role expected to be higher, as the affected properties in the of the major rivers such as the Severn and Thames in south tend to be of higher value and a greater proportion causing the damage. of the damage will be insured. In Hull, where over 6,000

Figure 12: Contents damage in Catcliffe from the June 25 event. This sight was common throughout the Sheffield and Doncaster area

11 In contrast to domestic claims, the total insured cost pay out more than is covered in the issued policies. For for commercial properties in the July floods is likely to be example, after major disasters insurers often end up lower than for the June flood, as the businesses impacted meeting the total costs of people having to relocate, or were generally smaller. There was significant damage to paying the full amount to replace contents that may have large commercial and industrial units along the River been undervalued when a policy was taken out.  Don in Sheffield during the June 25 event, and as a result, large business interruption losses are expected. Many of the shops on the ground floor level of the Meadowhall shopping center in Sheffield are still closed nearly three months after the flooding. In response to this concentration of damage, the local government set up a program in some areas to help small and medium-sized companies develop recovery plans so they can return to business as soon as possible, which should act to constrain business interruption costs. Overall, therefore, for the June event, commercial losses will be a big driver, whereas residential losses will play a much bigger role in the July event losses. Contents losses will vary between areas affected by the sudden flash floods compared to properties affected by fluvial flooding. Many properties at risk from fluvial flood risk received warnings directly from the EA, or indirectly through the media, in some cases as much as three or four days in advance. During RMS reconnaissance visits, the teams confirmed that many homes and businesses had responded to the warnings and had mitigated the flood risk by raising contents or lifting them to high floors to avoid damage. This was particularly evident in the July floods, where flood warnings were issued several days in advance along the Thames. Lessons had been learned from the June floods and people took flood warnings more seriously. However, for areas affected by flash flooding, residents were frequently taken by surprise and were unable to secure possessions or movable property. In addition to the direct damage to property, RMS has identified several elements from these events that will amplify losses due to the extent and severity of the floods, i.e., post event loss amplification. A big factor pushing up residential and commercial property repair costs will be additional cleaning costs from sewage contamination and the inflated prices for goods and services in short supply, known as demand surge. A shortage of drying equipment across Europe caused delays to repairs during the June floods, which subsequently impacted the July floods weeks later. In addition to this, the situation in Gloucestershire from the July floods was exacerbated due to power and water cuts, which hindered recovery efforts. A further issue that RMS expects to be a factor influencing the total payout for the summer 2007 floods is ‘coverage expansion,’ whereby insurers may need to

12 EVENT IN PERSPECTIVE

Hazard Perspective conditions as those observed this summer. Stationary East Coast lows, such as the June 25 rainfall event, have While it is not usual to have extreme rainfall and occurred in the past, causing widespread flooding. The flooding in the summer months, the frequency and East Coast rainfall event caused severe spatial extent of the summer rainfall has been extremely flooding along the East Coast of the U.K., resulting in unusual. Many rainfall records have been broken this notable flood damage to . Similarly, there have summer — it has been the wettest summer in England been other severe mesoscale convective complex (MCC) and Wales since 1766, when records began and record systems which have caused flooding, such as the 1952 daily rainfall totals have been recorded at many weather floods, where 228 mm of rain fell within 12 stations. Groundwater levels generally decline over the hours over the southwest tip of England. However, the May to September period due to an absence of natural July 2007 MMC event eclipsed this event in its spatial replenishment (recharge), and examples of significant extent and severity. and widespread summer recharge in the 20th century Although these severe rainfall events are therefore not are very rare. However this summer, groundwater levels unprecedented, the combination of two extreme events in the were above the normal winter levels by in the space of five weeks is highly unusual. The result the end of July. was that peak river flows in central England catchments There are several historical examples of extensive exceeded previous recorded maximums and summer summer floods affecting the U.K. (e.g., in 1875), flows were redefined over large areas. In many cases, particularly in the nineteenth century when summer river flows greatly exceeded the 100-year flows and half-year (May–October) rainfall often exceeded that broke monthly flow records in many catchments. During of the winter half-year. There have been severe flood the June events, period-of-record maximum flows events in the last century from similar meteorological were recorded in a number of catchments in Yorkshire and the same was observed in July for catchments for Warwickshire, Worcestershire, and Berkshire. The outstanding wet summer soils have allowed substantial aquifer recharge in some areas, a very rare circumstance in the context of the last 100 years. Are the extreme rainfall events a product of climate change? The drivers for the extreme U.K. summer 2007 rainfall events were the position of the jet stream, the warm moist air, and the fact that the storms have been relatively slow to move away. It is currently not possible to say that any single weather event can be directly attributed to climate change. Conclusions from the Intergovernmental Panel on Climate Change (IPCC) 2007 report suggest that in the U.K., over the time horizon of the next thirty years onward, extreme rainfall is likely to increase in the winter — predictions for the summer, however, are mixed. There is currently a great deal of uncertainty in the scientific literature around the likely changes in summertime precipitation, as extreme rainfall events may increase due to enhanced rainfall from isolated convective storms in a warmer atmosphere with more moisture, or conversely may decrease, due Figure 13: Flood height measurements outside a bicycle shop in Evesham, to a decreased number of precipitation days in the Worcestershire summer. Improved modeling and understanding of how

13 to attribute single events to climate change versus natural winter. The North Atlantic Oscillation (NAO), which climate variability will, in the future, help to reduce this has a strong influence on U.K. winter weather, is uncertainty for the U.K. predicted to be in a very weak negative phase this winter A final, important point is that increased extreme (forecasted index value: -0.34). Negative NAO phases rainfall does not automatically lead to increased flooding. typically bring colder and drier winters to the U.K. If For instance, if summers become drier, leading to this forecast bears out and there are no intense rainfall increased soil moisture deficits, this is likely to offset the events, the U.K. might narrowly escape further severe increased extreme precipitation to some extent, as the flood events in the coming weeks and months. soil will have greater capacity to soak up excess rainfall. Market Perspective Does the abnormal rainfall this summer The estimated insured losses from these summer events increase the risk of flooding this are the largest flood losses in insurance history for the winter? U.K. (Figure 14) and the largest U.K. natural catastrophe There are two factors that will determine flood risk since the destructive Windstorm Daria in 1990, which over the coming winter — firstly, the antecedent would cause around £4 billion in losses today. According conditions, and secondly, the actual weather patterns to the Chartered Institute of Loss Adjusters (CILA), and amount of rain we will receive. The exceptionally claims received in the two weeks following the June wet summer has led to a reduced soil moisture deficit floods were equivalent to two years of normal storm — meaning a reduced capacity to absorb rainfall. There and flood numbers. The summer floods follow on from is limited time now for the deficit to re-establish as the Windstorm Kyrill at the start of the year, which is growth ends and evaporation rates decrease with estimated to have caused around £600 million in insured declining temperatures and reduced solar radiation. High losses, making 2007 one of the most expensive years for groundwater levels and saturated soils will likely lead to U.K. insurers since Daria in 1990. the early onset of the winter recharge season, and if a The two catastrophic flood events each exceed the wet autumn and winter were to occur, water tables could November 2000 floods, which caused around £750 reach exceptionally high levels, leading to enhanced million in flood losses at the time and were the largest flood risk. Given the extreme hydrological conditions, insured flood losses in the U.K. until this year. However, slightly above average rainfall this autumn and winter the individual and combined flood losses from this could be enough to trigger further flooding, and from summer do not exceed the losses from the devastating this perspective there is a higher risk of flooding over March 1947 floods, if the event were to occur again the next months and into 2008 in central and northeast today. Earlier this year, RMS released the report 1947 England. U.K. River Floods: 60-year Retrospective (available on www. Weather patterns are far more difficult to predict. rms.com). RMS estimated that if the event were to At the start of September, U.K. Met Office seasonal occur again in 2007 under today’s defense standards forecasts are predicting average or below average rainfall that insured losses would be around £4.5–£6 billion. during the autumn months and average rainfall during The 2007 and 1947 flood events are very different. The 1947 floods were not caused by extreme rainfall

6 but by snow-melt in combination with heavy rainfall and impacted a much larger area. However, antecedent 5 conditions played a role in both events. This summer, the wet weather and reduced evaporation rates which began Billion) 4 in May saturated catchments in England and Wales and (£

3 increased water levels. In 1947, the frozen hard ground Loss

d from the severe winter was unable to soak up the snow re 2

su melt and precipitation leading to high levels of water

In runoff. 1 According to the Association of British Insurers

0 (ABI), there are more than two million homes at risk March Summer June 2007* July 2007*Nov 2000^ Carlisle Easter 1947* 2007* 2005^ 1998^ from coastal or inland flooding, and around 400,000 homes at very high risk of flooding (greater than 1.3% Figure 14: Recent historical U.K. insured flood losses (est. 2007) compared to or 1-in-75 annual probability as more and more homes the loss if the 1947 flood event were to occur again today. * RMS loss estimate, ^ ABI loss estimate. are built on the floodplain). Insurance coverage in the

14 U.K. is globally unusual in that flood cover is typically management and the importance to understand the flood included as standard within property insurance policies risk both on and off the floodplain. The flood events and members of the ABI are committed to continuing this summer have highlighted the flood risk outside the provision of cover as long as sustained and sufficient the floodplain and the importance to understand and investment in flood defenses continues. This has been assess the risk from all sources of flooding and the brought into question by floods such as the autumn potential correlation of flood risk. Flood zone maps, 2000 events and the Carlisle flooding in 2005 and has while useful for underwriting and assessing single been highlighted further by the catastrophic summer location flood risk, have limited use for portfolio floods. Over the last few years, the ABI has called for the management. Fully probabilistic flood risk models government to increase spending on risk management capturing all sources of flood risk provide the most and flood defenses to ensure that they can continue to accurate way to assess and manage portfolio flood risk. provide insurance and have proposed the government RMS remains committed to providing sophisticated to increase spending to £750 million per year by 2010. tools for the industry to price and manage their On July 3rd, the Environment Secretary, Hilary Benn, flood risk accumulations, having provided a fully announced that the government would increase spending probabilistic flood model for the U.K. covering both by £200 million to reach £800 million by 2010–2011. on and off floodplain sources of loss since 2002.  The ABI lauded this promise but added that the increase should come three years earlier in 2008–2009. The issue was enhanced further by the release of the new Government Housing Green Paper in July which commits the U.K. government to building three million homes by 2010. Within this paper, the government said it was unrealistic to rule out building within the floodplain but reported that strict measures would be put in place to ensure that no development is planned on land classified as high flood risk by the EA. Planning regulations have recently been tightened to make consultation with the EA a requirement, rather than a recommendation as previously (PPG25 in 2001 was replaced with Planning Policy Statement (PPS) 25 introduced in December 2006 by Communities and Local Government). However, the continuing demands for new housing, commercial premises and high-value projects in the Southeast will continue to put pressure on for development. The most notable example of this is the regeneration project through eastern London and beyond. The ABI responded to the Government Housing Green Paper by stating that new housing developments must be built away from flood-prone areas and designed with flooding in mind to ensure that flood insurance continues to remain widely available and competitively priced. Some insurers have already increased their property rates in response to the floods this summer. At the time of this report, the insurance and reinsurance markets are still evaluating the final costs of the summer floods, and thus the full impact is yet to be realized. Within the reinsurance market, there are suggestions that the hours clause definition may be redefined and extended beyond the traditional 168 hours commonly used in the U.K. What is clear is that these events will significantly focus the market on their flood exposure accumulation

15

Risk Management Solutions, Inc.

7015 Gateway Blvd. Newark, CA 94560 USA Tel 1.510.505.2500 Fax 1.510.505.2501 World Wide Web Tel 44.20.7444.7600 (Europe) http://www.rms.com E - m a i l [email protected]

© 2007 Risk Management Solutions, Inc. All rights reserved. RMS is a registered trademark, and the RMS logo is a trademark of Risk Management Solutions, Inc. All other trademarks are property of their respective owners.